Fluidra reached revenues of €753m in the first half of the year after a strong Q2 and reaffirms its forecasts for 2019August 1, 2019
North America, the company's biggest market, is gathering momentum once again after first quarter weakness caused by temporary factors, with a Q2 standalone growth of 12.5%
The cost synergy goal for 2019 has been exceeded, registering €21 million run rate. Guidance lifted from €19m to €25m of run rate savings by the end of the year
Fluidra, a global leader in the pool and wellness equipment market, increased its revenues by 2.4% in the first six months of the year to €753.2 million. This improvement highlights Fluidra’s global platform strengths, with operations in Europe maintaining momentum and the United States recovering from the weakness of the first quarter of 2019.
The group's EBITDA increased by 4% to €142.6 million between January and June, growing more than turnover and highlighting the company's cost management. This margin improvement was achieved by successfully managing gross margin, prudent opex investment in the second quarter, and the synergies reached through the integration process, which have surpassed the €19 million run rate. Cost synergies run rate target set for the financial year is now lifted to €25m.
"The temporary factors that made for a challenging start to the year are gradually disappearing and despite the adverse weather conditions that hit the United States and Southern Europe, we had a very good second quarter," explained Fluidra Executive Chairman Eloi Planes. "The fundamentals of the business remain solid and mean we are well positioned to achieve our 2019 guidance."
Fluidra estimates it will end 2019 with a turnover of between €1.35 billion and €1.4 billion, an EBITDA (Pre IFRS 16) of between €240 million and €260 million, and a net debt1 to EBITDA ratio below 2.6.
Residential Pools: A key factor in Fluidra's resilience
The Residential Pool division continues to generate the greatest volume of sales for the listed company, highlighting Fluidra's considerable resilience because of its aftermarket exposure. In fact, turnover from this division increased to almost €525 million, which is 4% more than in the same period last year once adjusted for perimeter.
Turnover for the Commercial Pool division, meanwhile, increased to €52.3 million during the period, which represents a year-on-year improvement of 3.7%, maintaining the positive trajectory that began in the previous quarter. Pool Water Treatment experienced a strong recovery into the second quarter, both in chemicals and water care equipment, to record 5.6% growth. Meanwhile Pool Fluid Handling showed excellent growth of 7.3% compared with the same period last year.
As to geographical breakdown, Rest of Europe showed the best performance in the first half of 2019, climbing 6.6%, followed by Southern Europe, which represents more than 40% of sales and whose turnover was up by 5.9%, both FX and perimeter adjusted.
Despite continued inclement weather, the second quarter showed positive progress in North America, with sales up 1.6% year-on-year between January and June, helped by FX and as the temporary factors that affected the first quarter start to wind down. The transfer of the gas heaters plant to Mexico, which limited shipments in Q1, is now fully operational and manufacturing well above the levels registered by the previous factory. Q2 standalone shows a strong 12.5% FX and perimeter adjusted growth for North America.
"Fluidra has two unique advantages: our global platform, which means we do not depend on one specific market, as well as our ability to generate cost synergies from the merger" said Mr. Planes.
Below the EBITDA line, non-cash purchase accounting amortization related to the merger meant Fluidra's pro forma net profit fell by 14.8% year-on-year in the first half of 2019 to €48.3 million.